Reference no: EM132860306

Question - The shareholders' equity of M. Gangoso Corporation at Jan. 1, 2019, appears below: 8% Preference shares, 250 par, 15,000 shares 1,450,000 authorized, 5,800 issued and outstanding

Share Premium-preference 870,000

Ordinary shares, 100 par, 200,000 shares authorized, 40,000 shares issued and outstanding 4,000,000

Share Premium-Ordinary 2,400,000

Retained Earnings 2,700,000

During 2019,the following transactions occurred:

Jan. 10 Issued 16,000 ordinary shares for 180 cash per share.

Jan. 23 Purchased 6,000 ordinary shares for the treasury at 200 per share.

Mar. 2 Shareholders donated 4,000 ordinary shares to the corporation.

Mar. 14 Sold one-half of the treasury shares acquired last Jan.23 for 210 per share.

Mar. 14 Sold the donated shares at 210 per share.

July 15 Issued 3,200 preference shares to acquire special equipment with a fair market value of 1,440,000.

Sep. 15 Received subscriptions to 18,000 ordinary shares at 250 per share.

Oct. 15 Received cash payment from each subscriber for 40% of the ordinary shares subscription price.

Nov. 15 Received the balance due on the Sept.15 shares subscriptions in cash and issued the stock certificates.

Dec. 31 Closed profit of 522,000 from the Income Summary account to Retained earnings.

Required -

1. Set up T-Accounts for the shareholders' equity accounts at the beginning of the year and enter January 1 balances.

2. Prepare journal entries to record the foregoing transactions and post to T-accounts. Determine the ending balances for the shareholders' equity accounts.

3. Prepare the Dec.31,2019 shareholders' equity section of the statement of financial position.